Sunday, October 27, 2013

Left-wing commentators are wrong to criticise my article in the Telegraph about the exodus of French entrepreneurial talent, says Anne-Elisabeth Moutet

Criticised: Anne-Elisabeth Moutet was told: 'Stories like yours are nothing but a massive swindle’Photo: Lucas Schifres

By Anne-Elisabeth Moutet

7:00AM GMT 27 Oct 2013

Since last week, when my Sunday Telegraph report
outraged France
(“British propaganda!” was a recurring theme) by suggesting that my
demoralised compatriots were leaving in droves, fleeing an economy
overburdened by regulations and levies, François Hollande’s government has
added three new taxes to the 84 that had been created in the past two years.

Not only will capital gains on a series of popular savings plans be now
subject to a 15.5 per cent flat tax, but also the measure is retroactive all
the way to 1997 – coincidentally (perhaps) the last time France elected a
Socialist government before this one.

It would be unfair to say that the irony went unremarked. The dozens of
reactions I heard – as well as the thousands of internet comments and
Twitter and Facebook shares of my story – mirrored the state of deep
division in which France finds itself.

Entrepreneurs are “really hunted away from the country”, wrote one
correspondent, and specifically targeted by “many stupid decisions. One
example: I created a business seven years ago; if I sell it now, I will have
to pay 60 per cent of the value I’ve created. Unfair and discouraging.”

Another correspondent wrote: “Would not change a word: we are now in decline,
and may never be able to regain the place of fourth-largest economy in the
world.”

“The people who really drive the French economy and keep the country afloat
are those in managerial roles or the professions, who know little or no job
security or social protection, working in those highly competitive parts of
the economy comparable to Britain or the United States,” said another
commenter. “But they are tiring of supporting the unproductive masses.”

Last week, the ministry of finance, prompted by opposition MPs, released
official emigration figures for 2011 (they assure you nothing more recent is
available) showing that departures had doubled from the previous year to
nearly 40,000. Professor Jacques Régniez of the Sorbonne, himself a
statistician, predicts that these should have climbed to 60,000 by the time
we get this year’s figures.

In the November-December issue of the foreign-policy journal The National
Interest, the US economist Milton Ezrati published a damning, comprehensive
study of the downfall of the French economy. “Whereas 10 years ago it
rivalled Germany’s,” he wrote, “today, France produces only half the value
added. France’s share of global exports has fallen from 7 per cent in 1999
to only 3 per cent today. During this time, its share of the eurozone’s
exports has fallen from 17 per cent to merely 12 per cent.” France, Ezrati
explains, is now outperformed even by Italy.

Like others, Ezrati blamed over-regulation: there are now so many complex and
protective labour laws, the Code du travail (labour code) exceeds 3,200
pages. He also quoted a recent authoritative OECD study that identified
“French failings in almost every major category: economic regulation,
product regulation, impositions by local policies, state control of the
details of business operations and barriers to entrepreneurship”.

The only area in which France didn’t blatantly underperform was,
unsurprisingly, red tape: French bureaucracy barely reaches the OECD
efficiency median.

You would think something of this would filter up to Hollande in his Elysée
bunker – he might disagree on the diagnosis, yet worry on the souring of the
public mood. You would be wrong: “Perception is reality”, the mantra of spin
doctors around the Western world, leaves the President cold. Increasingly,
his entourage reports that Hollande, despite hiring a communications team
headed by a popular former France 2 prime-time news presenter, Claude
Sérillon, believes he knows best how to speak to the French. “This may have
worked for de Gaulle,” says Philippe Moreau-Chevrolet, a political
communications expert. “Not for Hollande.”

The beleaguered president, whose unpopularity figures scale new heights
seemingly every week, still enjoys a vocal, if ever-diminishing,
constituency, who, when they do oppose Hollande, reproach him for not being
tougher on “the rich”.

Many of these work in the media, and as I defended my story on various radio
and TV panels all week, I encountered an interesting assortment of them. (I
have become something of a rent-a-reactionary in the French media, where a
“balanced” panel means three Left-wingers et moi.)

There was the France Inter (think Radio 4) hour-long programme in which
Sibylle Vincendon, a senior editor of the newspaper Libération, called all
critics of the economic and political situation “grumpies”. (She has a book
out on this theme, Pour en finir avec les grincheux. By the third page of
the introduction, the despicable “Anglo-Saxons” and their “free-trade” model
have been introduced. Vincendon believes that anyone, especially an
economist forecasting France’s decline, is evidencing a deep schadenfreude
and dark motives. The French, she says, need to “share more, not less”.)

Anne-Elisabeth Moutet's reply to her critics in Sunday's Telegraph

There was the debate on Arte, the French-German cultural public channel, in
which the right (by which I mean Left) kind of economist, Prof Benjamin
Coriat, explained that instead of the 75 per cent supertax hitting “only” a
few privileged citizens, national income tax should be raised well above the
current 45 per cent marginal rate, so that “everyone will pay”. Prof Coriat
is shocked that some people dare to oppose new taxes. “They’ll justify
anything not to cough up!” he thundered. He deplores the kind of movements
now emerging, such as Les Pigeons (a group of young entrepreneurs who oppose
over-taxation of start-ups), and the fact that some politicians listen to
these “bad citizens”.

Elsewhere, I was told that French emigration to Britain was “a myth”, the
figures “too low to even consider”. In an online chat, I was asked why I
wrote in English, implying that I was some sort of traitor. (“Because it’s
more fun?” didn’t seem to cut it as an answer.)
Many went on the attack: “Stories like yours are nothing but a massive
swindle,” a Le Monde Diplomatique editor told me. “For people leaving
France, how many come back after experiencing the lack of public services in
Britain, the inefficient Tube, the expensive, slow and badly maintained
trains, the threadbare NHS? It’s France that is bearing up best in the
crisis, not Britain: why do you think the richer of the English come to
French doctors and hospitals for proper treatment when they’re ill? Britain
has no industrial base to speak of: it only exists because of tax-rate
dumping, the City of London, and those nice, honest financiers operating
there. Britain is a terrible place to live except for the super-rich.”

France has remained in a thrall to Marxism to a degree that is rarely matched
elsewhere in Europe. While Germany, Italy and, in Britain, New Labour, swore
off it, Hollande’s Socialist Party never officially renounced it, in good
part not to offend its Leftist frenemies, of which there are many, who still
Believe.

In addition to the rump of its once-powerful Communist Party, France has three
Trotskyite mini-parties, a Green nebula, and one upstart radicalised
splinter from the Socialists, led by a charismatic philosophy teacher,
Jean-Luc Mélenchon, who ran for president against Hollande in the first 2012
round, and scored a very respectable 11 per cent, coming fourth behind
Hollande, Sarkozy and Marine Le Pen.

Because, for years, any Socialist candidate has needed all of the extreme Left
votes to win, the language of economic realism has never gained traction on
the Left in France. In private, the prime minister, Jean-Marc Ayrault, will
describe himself as a social democrat. Ask him to repeat it on the record
and you are faced with a stony glare, lest you create a political crisis for
him and his boss. As a result, the political tone on the Left has remained
frozen in a kind of Seventies radical aspic, a hoary kind of time travel in
which every capitalist, every entrepreneur, every high-net-worth individual
is guilty of starving the downtrodden masses.

“I left because I was tired of being considered little better than a
criminal,” says a French banker who is now happily ensconced in a Soho loft
with his family. “At a pinch, I could have paid the silly taxes; but it was
the constant sniping, the feeling that I had to apologise for everything I
achieved, the jealousy, the unremitting gloom, the guilt heaped upon you at
every turn; and the idea that my children would have to grow up in a country
where, at best, they could hope to become top civil servants, and duplicate
the system with no deviation from the norm.

“This president has no idea that there is a wide world outside France; he has
hardly travelled abroad; he speaks no other language; and he has no
curiosity. Eventually, you get tired of waiting for our rulers to wake up.”

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About Me

Anne-Elisabeth Moutet is a Paris-based journalist and political commentator. She is a columnist for the Telegraph and also writes on French affairs for the Weekly Standard and for Newsweek in the US. She often comments on the news on the BBC, BFM-TV, ARTE, al-Jazeera and France 24. This blog contains stories she wrote for these, as well as for The European, The Sunday Times, Tatler, Prospect, the Chicago Sun-Times, and more. Contact her here.
Follow @moutet here on Twitter.